Are foreign investors really snatching up as much of Africa as they can? It’s not that simple.

By Till BrucknerTill Bruckner is an international development expert with an interest in transparency, accountability, and the hidden power relationships that structure global politics and our daily lives. He works as an advocacy manager for Transparify, an initiative promoting integrity in policy research and advocacy. He is based in Mauritania.

October 20, 2015 - 2:53 pm

Over the past few years, the media has breathlessly chronicled an African land rush of mind-boggling scale and audacity. Highlights have included the handover of more than 300,000 hectares of Ethiopia to a single Indian company and a notorious incident in which Madagascar announced the transfer of nearly half of its arable land to a South Korean conglomerate, free of charge. Not all of the headline deals have been agricultural — there’s also the 150,000-hectare safari park for Dubai royalty near Tanzania’s Serengeti and a secret bid by foreign logging companies to clear-cut a quarter of Liberia’s surface area. But by far the greatest attention has gone to farming ventures.

According to one estimate, in the space of just a few years, international investors have snapped up the equivalent of Britain, France, Germany, and Italy’s farmland combined in the developing world. New data compiled by researchers in Senegal suggests, however, that such dramatic figures, which are usually compiled and reported by activist groups who are opposed to large-scale land deals, are vastly overblown. While the opacity of land transfers means that nobody knows for certain how much land has actually changed hands in Africa, a mounting body of evidence points to a recurring pattern in which insecure property rights and political disputes cause initially euphoric global investors to cancel proposed deals or walk away from farming projects across the continent.

Talk of a “global land grab” first took off in 2008, when food prices on international markets spiked due to a boom in biofuels and growing Asian consumption of meat and dairy, setting off riots around the world and leading key grain-producing countries to introduce export bans. Neo-Malthusians sounded the alarm over a new age of global food shortages. They pointed out that pressure on the planet’s reserves of arable land has been increasing inexorably due to population growth and land-intensive consumption patterns. According to one study conducted in 2008, a minimum of 515 million additional hectares of land would be required by 2030 to meet the human demand for food, wood, and biofuels — almost twice the amount that was actually available.

While development experts predicted tragedy, international investors rejoiced at a golden opportunity. Farmland suddenly became an extremely sexy investment, combining limited supply, guaranteed demand, and — as the global financial crisis started to bite — a perception of solidity, security, and comparatively low risk. When would-be investors discovered that huge tracts of agricultural land in Africa could be leased for up to 100 years with little or no strings attached, for prices as low as $1 per hectare, they went wild.

But problems started to multiply once investors started moving in on the ground. In some cases, the freshly minted landlords discovered that they had hugely underestimated the challenges involved in converting their new fiefs into profit-generating farmland. Elsewhere, relationships between foreign buyers and local residents degenerated into conflicts and even sparked violent clashes, with each side regarding the land as rightfully their own. One investment company in Mozambique discovered an entire village with its own post office on what had been described as vacant land by government officials. Forced evictions reportedly left many smallholder farmers across Africa homeless and hungry, and activist organizations chronicled how entire communities were being chased off their ancestral lands to make space for giant plantations. The resulting narrative of the greed-fueled dispossession of an entire continent is eloquently summarized by a 2014 Guardianheadline: “World Bank and UN carbon offset scheme ‘complicit’ in genocidal land grabs — NGOs.”

Such facile storylines are now being challenged by researchers in Africa, who claim that the amount of land actually changing hands is far less than commonly believed. African governments rarely disclose who is grabbing what, when, where, and on what terms — let alone for how much. A study conducted by Oxfam found that opacity is the norm across the developing world. “Finding out exactly how much land has changed hands is incredibly difficult due to the lack of transparency and secrecy that often surrounds the deals,” the anti-poverty campaigners complained.

Take Senegal’s biggest single land deal. Senhuile, a controversial joint venture set up by a shady coalition of foreign and local investors, is reported to have acquired 45,000 hectares of land. Simon Guillouet, a cartographer working in the Dakar office of CIRAD, an agricultural research institution, recently compared four different maps of Senhuile’s flagship plot. Three maps had been produced by government bodies and one by the company itself. Each map showed a different area of land. “I think conflicting maps are a way to hide the truth,” he said. “There is no transparency whatsoever, and all the contracts are secret. The companies and the state don’t want to give any information.”

In these circumstances, Guillouet explained, the advocacy groups compiling and aggregating land-grab figures were flying blind. “NGO reports usually overestimate both the amount of transactions and the surface area of each transaction,” he said. “Local groups, in particular, are primarily interested in mobilizing people against a project. While they collect good data on some aspects of land deals, such as how companies can manipulate local populations, they have no mapping expertise, and their methodologies are flawed.”

Working from satellite imagery, the cartographer was able to determine that Senhuile’s flagship plot covers 20,000 hectares. As for the additional land plots that Senhuile has in the past claimed to control elsewhere — nobody knows for sure. The headline figure of 45,000 hectares publicized by Senhuile and subsequently adopted by NGOs seems to include a high-profile 20,000-hectare deal that eventually fell through.

Such miscounting is widespread in the sector, experts point out. Many NGOs simply aggregate the numbers cited in local media reports, which tend to cover initial visionary announcements rather than the more prosaic, low-key transactions that actually take place — if they take place at all. “It is difficult to assess whether the number of land transfers is actually under- or over-estimated, especially when there is no central cadaster or land registry,” warned Marie Gagné, a doctoral researcher based in Dakar who studies land deals. “Groups opposing land deals may report the highest available figures, while proponents of agribusiness may obscure the fact that several land deals likely remain unreported in databases.”

Guillouet, who is currently mapping land deals in Senegal by combining satellite imagery with GPS surveying on the ground in an attempt to get reliable figures, has concluded that the frequency and scale of land transfers in the developing world is almost certainly far lower than is claimed by advocacy groups. For example, two Senegalese NGOs have announced to the media that local and international actors had grabbed a total of 845,000 hectares, almost a quarter of the country’s arable land. “They really believe that figure,” said the cartographer. “But the true number is probably less than 100,000 hectares for all domestic and foreign agribusinesses combined, excluding mines, with foreign investors accounting for about half of that area.” He also pointed out that in some — though certainly not all — cases, local populations welcomed and benefited from the deals.

There is a reason why the gap between reported and actual land transfers is so large. Once foreign investors are on the ground, they often discover that turning a profit on African soil is far tougher than they had expected, and many scale back or abandon their ambitious schemes. “Agribusiness investors often complain about unclear administrative procedures, difficulties in obtaining funding and agricultural insurance, complexities in gaining access to land, poor infrastructures, and deficient commercial value chains,” Gagné reported.

In particular, the legal ambiguity and weak property rights surrounding land tenure across much of Africa can cause foreign investors endless headaches. Even investors seeking to respect national regulations can inadvertently run afoul of local laws. “According to Senegalese law, land administered by rural councils cannot be sold or leased and must be allocated to residents of the community,” explained Gagné. “Paradoxically, rural councils sometimes allocate land to foreigners in contravention to that law.”

According to Adama Faye, a researcher with IPAR, a Senegalese think tank specializing in land reform issues, much of that uncertainty is rooted in history. “There’s the modern law, and then there’s traditional customary law,” he said. “Traditionally, land has been viewed as collective family property, not individual property that can be bought or sold.” He warned that while current moves by governments in the region to challenge this status quo and turn land into a commodity may have some economic merit, they are political dynamite.

Follow-up research on the four megadeals mentioned above shows just how easily investors can get caught in the ensuing crossfire. In Ethiopia, after the Indian company Karuturi’s landmark investment foundered commercially, relationships with Ethiopian officials quickly turned sour. The company scaled down its operations, and its CEO recently stepped down. Shares in Karuturi, which had peaked at nearly $40 in 2008, can now be had for $2.70.

In Madagascar, a popular outcry forced the government to cancel the proposed handover of 1.3 million hectares to South Korea’s Daewoo Logistics Corp. and may have ultimately cost the president his job. Tanzania’s private game reserve plan also appears to have become a political football. The country’s leader reportedly backtracked on the safari park agreement late last year, though numerous reports indicate that forcible evictions of local Maasai herders from the proposed park area are continuing apace.

But the prize for the biggest land policy pirouettes goes to Liberia, which seems to have perfected the art of repeatedly cashing in on the same pieces of land. In 2006, it canceled all previously issued logging concessions. Then, officials resold the country’s forests before revoking most of the permits a second time. Most recently, the government has pledged an independent review of all remaining concessions and promised to halt all agriculture-related deforestation by 2020 — in exchange for $150 million of Norwegian aid.

In hindsight, some foreign investors’ initial perception of African farmland as a safe bet that combined low risk and high returns seems hopelessly naive. “If you privatize — no matter what model you choose — if there is no good governance, there will be problems,” said Faye.

Correction, Oct. 20, 2015: The safari park that Tanzania’s government planned to sell to a private company based in Dubai was 150,000 hectares, or approximately 370,000 acres. A previous version of this article mistakenly said that the park was 370,000 hectares.